SSARS Engagements

Question 1

Statements on Standards for Accounting and Review Services (SSARS) are applicable for a compilation of a nonissuer. (true or false)

Answer 1

true

SSARS requires compiled financial statements to be accompanied by a compilation report.

Question 2

An accountant is required to comply with the provisions of Statements on Standards for Accounting and Review Services when engaged to prepare, compile, or review the financial statements. (true or false)

Answer 2

true

Question 3

SSARS explicitly states that SSARS does not apply when an accountant prepares personal financial statements for inclusion in written personal financial plans. Other situations where SSARS does not apply is when the accountant prepares financial statements:

Answer 3

• solely for submission to taxing authorities,
• in conjunction with litigation services that involve pending or potential legal or regulatory proceedings, or
• in conjunctions with business valuation services

Question 4

The accounting and review services committee is the authoritative body designated to promulgate standards concerning an accountant’s association with unaudited financial statements of a nonissue (i.e., an entity that is NOT required to file financial statements with an agency regulating the issuance of the entity’s securities). (true or false)

Answer 4

true

Question 5

When an accountant performs more than one level of service (for example, a compilation and a review, or a compilation and an audit) concerning the financial statements of a nonissue, the accountant generally should issue the report that is appropriate for the highest level of services rendered. (true or false)

Answer 5

true

Question 6

SSARS apply when an accountant prepares, compiles, or reviews financial statements. Using information in the general ledger to prepare financial statements outside an accounting software system is considered a preparation engagement. (true or false)

Answer 6

true

Question 7

Statements on Standards for Accounting and Review Services (SSARS) establish standards and procedures for an engagement to compile an individuals personal financial statements to be used to obtain a mortgage. (true or false)

Answer 7

true